In the Web Interface section, it mentions how to assign colors to friends as you add them. But this is also the way to edit the colors for Friends you already have defined. It's unlcear for many people that you can use/re-use this form as needed to alter the colors without needing to delete your friends and re-add them. Meaning, the wording of the FAQ implies these color-fields can only be used when literally *adding* a friend.
I'd suggest the following edits in the one paragraph (italicized):
"Finally, there is a text area where you can enter up to five usernames to add to your Friends list, and select foreground and background colors for them. You can also use this area to alter the colors for your existing friends. Simply enter their username again in this area and select the desired colors. After you have made all the changes you wish to make, you need to select "Save Changes" at the bottom of the page."
(and before I forget, I think there's a little 'a' missing at the beginning of that sentence -- underlined in my example text there.)
Wording is just a suggestion of course, but I think it would help quite a bit to spell it out that it works for existing Friends as well.